What Does A Business Gain From Third-Party Financial Management Services?

Financial management services sound like a problem a company would like to handle in-house. However, many firms, even large ones, lean on third parties for help with financial management needs. What do these enterprises gain from seeking outside assistance? They often see benefits in these 5 areas.

Cash Flow Management 

One of the main goals of any business is to sustain sufficient cash flow to continue operations and seize opportunities as they materialize. This includes monitoring cash flows for potential changes, such as declines due to macroeconomic trends. This can help a company to anticipate problems and plan for specific scenarios, such as industry-wide shifts or recessions.

Profit Maximization

Even if a business has excellent cash flow, it might still not be maximizing its profits. Financial management professionals look at how companies can pair their costs to their returns to ensure they're getting the most from inputs. They will also monitor industry data to make sure the company isn't falling behind pricing trends, especially for similarly positioned brands, products, and services.

Liquidity Requirements

Many operations need to maintain specific liquidity levels for either practical or regulatory reasons. This goes beyond cash flow because it includes keeping an eye on the available cash on hand and assets that can be rapidly liquidated. If a business is leveraged on certain financial products or securities, for example, it may need to respond with liquidity if interest rates change rapidly. Keeping this kind of liquidity on hand often reassures lenders and reduces borrowing costs.

Financing and Other Capital Structures

A business will frequently rely on both short- and long-term financing to handle asset purchases, inventories, and sales. Similarly, it may use other capital structures, such as venture capital, to handle medium- and long-term needs. A financial manager can help you with presentations to banks and investors to ensure you're offering the fullest picture of your company's current situation and future projections.


Risk assessment can operate as an entire branch of financial management services, and many firms work with third parties that just manage risk projections. However, you will also find risk management integrated into other service models. The goal is to study existential financial risks.

Suppose a company believes it has a diversified asset portfolio. However, a financial manager notices that the company's real estate and bond exposure both make it vulnerable in a high-interest and high-inflation environment. The manager might encourage the company to hedge out of some of those risks to reduce its exposure.

Contact a local financial management service to learn more.